The Evolution of Choice
by Carolyn Ellis Ms. Ellis is Features Editor for Advisor Magazine and L&HA e-newsLink. Connect with her by e-mail: firstname.lastname@example.org
As Senior Vice President of Sales and Business Development, Scott Sullivan drives revenue for GoHealth Insurance, a national marketplace for subsidized and non-subsidized health plans. On the first anniversary of the Affordable Care Act we talked with Scott about the future of COBRA and how consumers and employers are benefiting from new options for individual health insurance.
L&HA: What is GoHealth?
SS: We’re a marketplace for health insurance plans. We have a proprietary platform that we lease out to health insurance brokers across the country, white-label for carriers, and utilize for our own purposes through some senior relationships and direct-to-consumer advertising. Our customers are consumers, health insurance agents, and health insurance carriers. My main responsibility is to drive revenue across our three business units.
L&HA: For the last year we’ve been hearing the term marketplace associated with the Affordable Care Act.
SS: Marketplaces have been in effect for almost a decade, but the term really came into everyday use for the Affordable Care Act. At GoHealth we’ve had a multi-carrier quoting and enrollment platform with big carriers like the Blue Crosses and Humanas and Assurants going on about nine years now. The Affordable Care Act brought into the fold the ability to have a guaranteed issue environment, and the ability to get a subsidy from the government.
L&HA: January 2015 brings the first anniversary of ACA. How are you feeling the impact?
SS: Open enrollment started November 15 and it goes to February 15, so we’re in the heart of it now. As we speak, today is the last day to buy a plan that will go into effect on January 1, so it’s complete craziness over here. A lot people are finding new quality coverage. That’s the most important thing.
L&HA: COBRA (Consolidated Omnibus Budget Reconciliation Act) since 1986 has required group health plans to provide temporary continuation of group health coverage. How has COBRA served employees and employers?
SS: When employees are terminated or no longer offered a group health insurance option by an employer, COBRA has been a way to elect to receive a guaranteed insurance policy. It’s a transition option for the employee and it was very relevant because prior to the Affordable Care Act, individual health insurance was not guaranteed issue. If someone had previous conditions or took medications that would deem them “not eligible” for a traditional major medical policy, COBRA was an alternative so they could maintain their coverage for a transition period.
L&HA: Is it possible the Affordable Care Act will make COBRA obsolete?
SS: That’s too strong a term, because there are circumstances where COBRA is still a quality option. However, a qualified health plan (QHP) as an alternative to COBRA has become very relevant because it’s more cost-effective for the consumer.
Based on our metrics from last year, the average COBRA policy was about 40% higher for individuals and about 56% higher for a family, compared to an individual who found an ACA-relevant health insurance policy. So I think that, while it will still be in effect for some circumstances, qualified health plans are really looking to be a better alternative for most consumers.
L&HA: COBRA locks participants into the employer’s offered plan.
SS: If you elect to take a COBRA plan, you are at the mercy of what your employer had selected as your benefit packages, your network, and so forth. If you opt to get a qualified health plan, you’re more often than not going to be receiving financial assistance, and you can pick a plan out that works for you and your family.
L&HA: What triggers a special enrollment period?
SS: If you lose your job, get divorced, or have a child, those are the three biggest factors we see. When you experience a special election event, you can buy a subsidized health insurance product 12 months of the year. If you choose COBRA you lose the option of the special enrollment period and will have to wait to buy a subsidized health insurance product until the open enrollment period, November 15 to February 15.
L&HA: Are there any cases where COBRA is the better option, depending on your deductible or needing to stay with your current doctor?
SS: People want to stay within the same framework of doctor, network, and that type of thing. However, often the consumer can find the same benefits if they have an organization or tool to help them do some research. The consumer can frequently save 40% or more, based on what they pay for their COBRA option, and still get the network and doctor that make sense for them. Having a licensed advisor listen to your needs and then utilize the right tools to find the best solution for you is what’s making a lot of sense out there now.
L&HA: So how quickly are agents and advisors getting up to speed?
SS: If you look at all the policies we wrote last year, roughly 200,000 policies during last year’s enrollment period, 85% of these folks were eligible for a subsidy. These people are appreciative that they’re able to get health insurance, many for the first time, and they’re getting this great financial assistance. We’ve got to train our agents pretty hard on the topic. Plans differ based on the state you’re in, so we make sure agents are only licensed in a handful of markets.
L&HA: Are there multiple ways to enroll?
SS: At GoHealth we support three different enrollment mechanisms. You can do it online, via a paper application, or even 100% over the phone. If you want to go straight through our platform and enroll you can, but we see the heavy majority want to do some shopping on their own but then talk to an agent to get some more specifics about Plan A versus Plan B. We support online applicants with click-to-chat or click-to-call.
L&HA: Are these advisors selling other types of insurance or investments to these same clients?
SS: They’re selling the products that would be relevant based on purchasing a health insurance plan — dental, vision, term life, those types of things, some tertiary or secondary products which could be a solid addition to what the individual’s buying on the medical side.
L&HA: What models are you using with agents?
SS: A broker has two ways he or she can access the individual market. We can go to brokerage houses and say, ‘We’re going to help you get into individual space. If you’re aggressive and you want to go ahead and get appointed, certified and set up, we’ll help you do that. We’ll help you with carrier contracts; we’ll give you technology and know-how to run that side of the business.” Or, if you want to look at this as an extension to your existing offering, it can create a new revenue stream, but you don’t want to complicate what your brokers’ core responsibilities are, which may be group benefits or something of that nature, you can work on a referral model. Having both those options resonates with the broker community.
L&HA: What else has changed since January 2014?
SS: With many turbulent factors in the space, it’s important to be proactive. Historically agencies or carriers have looked at retention in a reactive mode. They would wait for the consumer to phone and say, ‘Hey, I had a rate increase and I want to look at other plan options.’ Now there’s an ongoing need to educate consumers and brokers, and that’s what we’re trying to accomplish here.